Tag Archives: The Financial Crisis: How Did We Get Here

The Guardian gave us a piece that is just too unequal for words (at https://www.theguardian.com/inequality/2018/jul/07/its-time-for-britains-millionaire-pensioners-to-pay-up). Not only is the stage wrongfully set by Phillip Inman, he hides behind the emotional drive and gives no consideration of the historical facts. So even as he ‘treated’ some people to ‘The Financial Crisis: How Did We Get Here‘, we need to see the right setting on how the inactivity of some got us to this place. He starts right of the bat with ‘The retired are having a great time at the expense of young families thanks to generous pensions and property wealth‘. You see, the property boom is fictive, artificial and pushed because some council’s needed to look good for investment, the prices are driven upwards. The fact that three governments have been totally ignorant of the housing situation and that is shown with an utter lack of social housing is one piece of this evidence. In addition, some of these places have been taxed again and again, in some cases up to four generations. Phillip does not notify the reader on that part. The bigger and even more deafening blow of injustice is given with: “A two-year investigation by the Intergenerational Commission, a group sponsored by the Resolution Foundation think-tank, has found that what it calls the “contract between the generations” is at breaking point. It warns that society risks dumping a disproportionate amount of the costs of an ageing population on their shoulders. It’s been going on for some time and now the situation is acute“, you see I was largely aware of that part in the 90’s, when I was not in the UK. Several people notified their governments of this danger (Netherlands, Germany, UK and Austria), yet those governments were all about sailing in good weather, it was not on their plate, so they ignored it. Several players in these places warned of the dangers and in the end too little was done, until it was too late and now everyone is crying on the hardship that comes. The largest portions of those people now getting a pension worked, they worked every day and more hours than ever compensated for. All the elected politicians who remained asleep, optionally on Viagra or at parties ignoring the long term effects as they would no longer be in office (which is a speculation on how they used their time). Now those in office are set in a stage where they cannot unset the rights that these people acquired. Now it is all about “54-year-olds and above – are making increasing demands on an economic and social system that, after the 2008 financial crash, can barely cope with existing commitments“, yet those are demands that they were entitled to. They were taxed, often taxed too high and whilst some politicians made really poor decisions on how to invest these surpluses, they never considered that the losses would remain to bite everyone and now there is almost quite literally hell to pay for these people, and in this case these people are not the retirees, they are the former elected politicians, the economic advisors and the consultants that were hired at a much too high overpriced setting.

When we see “subsidised deposits: that just sent house prices spiralling upwards“, we should take the home owners that live in their home, all paid off out of the equation, should we not? In that same setting “It’s because they have a generous occupational pension and property wealth beyond anything they might have considered when they bought their first home“, you see, as long as they live in that house, it is their home, not wealth, not something they eat. Those caught in the bubble should not get taxed because they merely want a roof over their heads. Yet, in the eyes of those economists that does not count. Yes, those economists who have been setting the stage in their own advantage for decades, they are all ignored in this, are they not?

I do however like the setting that Phillip gives with: “Baby boomers had no idea that the overly generous pensions, failure to deal with the overspill from dirty industries and nimbyism would build up costs for the young“, yet in all this, he does not mention that since 1996 certain changes were needed, because the greying population issue was already well within the scope of everyone (everyone with any level of intelligence that is).

So when we see: “The commission and IF say working pensioners should at the very least pay national insurance. We should go beyond this policy and force the retired to pay income tax under a separate regime. This would set the 40p rate at £20,000 (compared with £43,000 for workers) and the 45p rate at £40,000 (against £150,000 for workers). A new regime for property tax is also needed that taxes more wealth at a lower rate, spreading the load and making it less avoidable, capturing the rich and middle-income earners alike”

We need to change the setting. We need to make it very clear that this is not just wrong; we should demand that these people come out in front of it all. Not hide behind the word ‘commission’, but we are entitled to know the people and they need to be held accountable for their actions in this.

So,

David Willetts, Executive Chair of the Resolution Foundation (chair)

Ben Page, Chief Executive of Ipsos MORI

Carolyn Fairbairn, Director General of the CBI

Frances O’Grady, General Secretary of the TUC

Geoffrey Filkin, Chairman of the Centre for Ageing Better

John Hills, Professor of Social Policy at the LSE

Kate Barker, economist and former MPC member

Nigel Wilson, Group Chief Executive of Legal & General

Paul Johnson, Director of the IFS

Sarah O’Connor, Employment Correspondent at the Financial Times

Torsten Bell, Director of the Resolution Foundation

Vidhya Alakeson, Chief Executive of Power to Change

All commissioners of the Intergenerational Commission (at https://www.intergencommission.org/), in addition to this, all the economic advisors where bad advice can be identified, those economists, need to get taxed for the losses that their advice caused out of their own pocket. You cannot tax one population twice over, whilst these people get richly rewarded for not doing their job correctly in the first place. The UK was far behind, when the BBC gave us in 2007: ‘The UK is going through the biggest pension shake-up in 50 years’, they were already a decade too late, this is not news, this issue has been slowly growing for over a decade and now we get highly priced think tanks giving out reports on how to solve stupidity and inaction. So when we see “In an attempt to improve the state pension prospects of women – who often take time out of work to look after children – the number of years of National Insurance Contributions (NICS) it takes to earn a full state pension will be cut from 44 to 30. This will mean millions more people, mainly women, will be entitled to a full state pension. The government has also tried to tackle the issue of vanishing workplace pension provision, as firms move to cut staff pensions” (at http://news.bbc.co.uk/2/hi/europe/6937301.stm), we see a level of inactions from a failing setting. Instead of giving a clear change of more payments into the pension system, we see a feigned ‘the number of years of National Insurance Contributions (NICS) it takes to earn a full state pension will be cut from 44 to 30‘, so not only is there an issue of shortage, the setting that a full pension could be earned was set to 68%, so 30% is close to gone, because all the late starters now suddenly get a full pension. When you realise those levels of close to insane stupidity, will the hearings show that economic advisors told them that it would work? So who were these consultants? We want full disclosure of these people. Should we not be allowed those facts? And when we confront these people will their reply be: ‘it was slightly more complex than I comprehended‘. So can we foreclose on these highly paid consultants and auction off their belongings to make up for the losses?

If that sounds unfair, consider the unfairness of taxing a group after a lifetime of service (or at least 68% of the time) again? Most these people had to bend over backwards to keep their place, keep their job and when it is finally retirement time, we hit them again. I think that this is beyond acceptable.

So when we see the end “The millionaire no longer just lives in the squire’s house. Times have changed. The retired teachers of Beverly in Yorkshire, and former BT engineers in Tunbridge Wells, are having a great time at the expense of young families” then my response is: ‘It is a fucking lie!‘ They are living of funds that they were taxed for their entire lives, the fact that they live in places that they made liveable is because they worked on it most of their live and suddenly that value is because no one was willing to contain the housing bubbles as it call in the foreign investors. That is the truth of the matter and whilst we all consider that truth, also consider the article (at https://www.theguardian.com/society/2018/feb/04/anger-over-glut-of-posh-ghost-towers-london), where we see “London councils have granted property developers planning permission to build more than 26,000 luxury flats priced at more than £1m each, despite fears that there are already too many half-empty “posh ghost towers” in the capital“, the Battersea Powerhouse, where social housing was cut after agreements were ‘adjusted’, and as we see in addition: “Politicians and housing campaigners said the figures show councils are prioritising the needs of the super-rich over those of hardworking young Londoners“, we start to see how the entire setting from Phillip Inman is just a load of bollocks, the flawed London setting is showing that the infrastructure will collapse sooner rather than later, it is a simple setting because empty places do not fuel the needs of groceries, butchers and supermarkets. They are merely empty plots that have only value for the investor and only for as long as profit can be made. Not only is the pension setting a travesty, when seen against the backdrop that David Lammy, the Labour MP for Tottenham gives “Just 6,423 affordable homes were built in London during the 2016-2017 financial year (the latest figures available), a 5% decline on the previous year and a big drop from the 19,622 built in 2014-15“, labour is not innocent here either, the previous labour governments were no help in any way and whilst we see how 26,000 luxury flats are added to the London region driving prices even further up, the setting of: ‘to generous pensions and property wealth‘, is merely a facade on inflated egos and the need to find taxation for those houses to be vacated so that they get upgraded too. Some people should be ashamed of themselves and until those names are out in front in the open and those who failed get prosecuted, until that day is fact, there is not acceptable setting where the pensioners are to be taxed in any way.

It just ain’t cricket!

Oh and whilst we are at it, can someone please sack the entire Wandsworth council? When we need to set to the forefront “Only 9% of the homes will be affordable, far below London mayor Sadiq Khan’s 35% affordability target for all new large developments” again (I already did that last year), we need to make sure that those who allowed that drop will never be allowed to work anywhere in government ever again, let’s face it, they could still become barber or Uber driver.

In addition, in a flair of social justice when we see “The Coutts figures, compiled by housing data service LonRes, show that developers are pushing ahead with the vast number of expensive new flats despite failing to sell more than half of the 1,900 luxury homes they built in London last year“, these developers should not be allowed to continue, unless the unsold apartments are leased for social rentals to the council at £1 per year, whilst 80% of the rent goes to the pension funds fuelling it and 20% is for the developer (for their cooperative trouble). So, I solved the entire issue for the next 5 years without having to tax the pensioners and getting almost 1,000 additional social homes. There was not need to get 12 commissioners involved, we merely need Mayor Sadiq Khan to set the London legislation to that solution. I do believe that the lord mayor owes me a large cappuccino with two sugars and a warm blueberry muffin. That’s not too outrageous a fee, is it?